THE PROFESSIONAL ETHICS COMMITTEE
FOR THE STATE BAR OF TEXAS
Opinion No. 650
May 2015
QUESTION PRESENTED
Must a law firm withdraw from representing a client in a lawsuit when the law firm hires
an employee who is not a lawyer, paralegal or secretary but who was previously employed by the
law firm that represents the opposing party in the lawsuit?
STATEMENT OF FACTS
Firm A is a law firm representing the plaintiff, and Firm B is a law firm representing the
defendant in a lawsuit. While the lawsuit is pending, Firm A hires a marketing assistant who had
been previously employed as a marketing assistant at Firm B. Firm A seeks to determine
whether it must withdraw from representing the plaintiff in the lawsuit, and if not, whether it
must utilize screening procedures to prevent the new employee from being involved in the
representation of the plaintiff and from sharing confidential information concerning the
defendant with anyone in Firm A.
DISCUSSION
Because the factual situation considered here involves a law firm’s nonlawyer employee,
the requirements of Rule 5.03 of the Texas Disciplinary Rules of Professional Conduct, entitled
“Responsibilities Regarding Nonlawyer Assistants,” must be considered. Rule 5.03 provides in
full as follows:
“With respect to a nonlawyer employed or retained by or associated with a
lawyer:
(a) a lawyer having direct supervisory authority over the nonlawyer shall
make reasonable efforts to ensure that the person’s conduct is compatible with the
professional obligations of the lawyer; and
(b) a lawyer shall be subject to discipline for the conduct of such a person
that would be a violation of these rules if engaged in by a lawyer if:
(1) the lawyer orders, encourages, or permits the conduct involved; or
(2) the lawyer:
(i) is a partner in the law firm in which the person is employed, retained
by, or associated with; or is the general counsel of a government agency’s legal
department in which the person is employed, retained by or associated with; or
has direct supervisory authority over such person; and
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(ii) with knowledge of such misconduct by the nonlawyer knowingly fails
to take reasonable remedial action to avoid or mitigate the consequences of that
person’s misconduct.”
In the circumstances here considered, Firm A and its lawyers are required by Rule 5.03 to
employ the newly hired marketing assistant in a way that avoids conduct that, if by a lawyer,
would violate other provisions of the Texas Disciplinary Rules of Professional Conduct. Rules
of particular concern here are Rule 1.05, requiring protection of confidential client information,
and Rule 1.09, prohibiting certain representations adverse to a lawyer’s former client. Taken as a
whole, these rules require a law firm to manage nonlawyer employees so that confidential
information of clients of a nonlawyer’s former law firm employer is protected from unauthorized
disclosure or use against the clients of the former law firm. A law firm is not automatically
barred from representation in a lawsuit because the firm employs a nonlawyer who formerly
worked for another law firm while that firm was representing an adverse party in the lawsuit.
However, the employing law firm may be prohibited from continuing the representation if it fails
to take reasonable steps to protect confidential information concerning the adverse party that
may be in the possession of the new nonlawyer employee. See Professional Ethics Committee
Opinion 472 (June 1991) (concerning employment of a secretary or legal assistant). Also see the
discussion regarding nonlawyer employees in Opinion 644 (August 2014) (concerning a newly
hired lawyer who before becoming a lawyer worked as a law clerk for another law firm in its
representation of a party in a lawsuit in which the new lawyer’s current employer represents the
opposing party).
In this case, Rule 5.03 requires that the lawyers in Firm A make reasonable efforts to
ensure that their nonlawyer personnel receive sufficient training so that they understand and act
consistently with the obligations of the firm and its lawyers with respect to protecting the
confidential information of clients of a nonlawyer employee’s former law firm employer. The
lawyers in Firm A could be subject to discipline if the newly hired marketing assistant has
confidential information concerning the defendant and the law firm orders, encourages or
permits the new employee to disclose or use such confidential information to the disadvantage of
the defendant or if the firm fails to take reasonable remedial action after learning of the
disclosure or use of such confidential information. In the event of a disclosure or use of such
confidential information, Rule 1.06(b)(2) may also require Firm A to withdraw from representing
the plaintiff because its continuing representation in the lawsuit may reasonably appear to be
adversely limited by the lawyers’ or law firm’s responsibilities to a third person, namely the
defendant, or by the lawyer’s or law firm’s own interests.
In the absence of an actual disclosure or use by the marketing assistant of confidential
information acquired prior to employment, the lawyers in Firm A generally would not be subject
to discipline under the Texas Disciplinary Rules. However, even if there is no actual disclosure
or use of confidential information, Firm A could be subject to disqualification by a court.
Although courts often look to the Texas Disciplinary Rules of Professional Conduct in deciding
disqualification issues, the Texas Disciplinary Rules are merely guidelines, rather than
controlling standards, in judicial decisions on disqualification. See, e.g. In re NITLA S.A. de
C.V., 92 S.W.3d 419, 422 (Tex. 2002); In re de Brittingham, 319 S.W.3d 95, 98 (Tex. App.-San
Antonio 2010, orig. proc.). In Texas courts, if a member of Firm B’s staff, such as a secretary or
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paralegal, worked on the matter involving the defendant in the lawsuit and then left Firm B to go
to work for Firm A, to avoid disqualification, Firm A must put in place adequate screening
procedures for the purpose of preventing the newly hired employee from disclosing or using the
defendant’s confidential information. In re Guaranty Insurance Services, Inc., 343 S.W.3d 130
(Tex. 2011); In re Columbia Valley Healthcare System, L.P., 320 S.W.3d 819 (Tex. 2010); Grant
v. Thirteenth Court of Appeals, 888 S.W.2d 466 (Tex. 1994); Phoenix Founders, Inc. v.
Marshall, 887 S.W.2d 831 (Tex. 1994). These decisions all recognize that when a lawyer or a
staff member of a law firm works on a matter for a client, there is a conclusive presumption that
confidential information of the client is imparted to the lawyer or staff member. This conclusive
presumption prevents the client from being required to reveal the confidential information as part
of a disqualification action. In these decisions, there is also a second presumption that the
nonlawyer employee shares the client’s confidential information with the lawyers in his or her
new firm, but that presumption is not conclusive and can be overcome by the implementation of
appropriate screening procedures. In contrast, in the case of a lawyer moving from one firm to
another the second presumption is conclusive and screening will not avoid the disqualification of
the law firm. See Professional Ethics Committee Opinions 598 (July 2010) and 578 (July 2007);
Henderson v. Floyd, 891 S.W.2d 252, 254 (Tex. 1995). Compare Opinion 644 (August 2014)
(screening not effective in the case of a newly hired lawyer who before becoming a lawyer
worked as a law clerk for another law firm in its representation of a party in a lawsuit in which
the new lawyer’s current employer represents the opposing party).
In this case, if Firm A utilizes appropriate screening procedures designed to prevent the
newly hired employee from revealing or using confidential information of the defendant to the
detriment of the defendant, Firm A does not need to consider withdrawing from representation of
the plaintiff in the lawsuit unless the newly hired employee actually reveals confidential
information of the defendant to someone else in Firm A or actually works on the lawsuit. See In
re Guaranty Insurance Services, Inc., 343 S.W.3d 130 (Tex. 2011).
The one remaining question is whether Firm A is required to utilize appropriate screening
procedures with respect to the newly hired marketing assistant to avoid being disqualified from
representing the plaintiff in the lawsuit. The facts considered in this opinion are that the
employee worked as a marketing assistant both for Firm B and then for Firm A. The position or
duties of the employee, however, are not determinative. The critical issue is whether the
employee worked on the matter in which Firm B was representing the defendant in the lawsuit or
otherwise had access to information relating to Firm B’s representation of the defendant. If not,
there is no presumption, conclusive or otherwise, that confidential information of the defendant
was imparted to the employee while working at Firm B. In re Columbia Valley Healthcare
System, L.P., 320 S.W.3d 819, 828 (Tex. 2010) (“We finally note that these requirements apply
only to nonlawyer employees who have access to material information relating to the
representation of clients . . . .”). However, if the employee had worked on the matter in which
Firm B was representing the defendant in the lawsuit or otherwise had access to information
relating to Firm B’s representation of the defendant, it would be necessary for Firm A to utilize
appropriate screening procedures in order to avoid disqualification. On the other hand, screening
procedures would not be necessary if Firm A could determine, perhaps in part based on the
marketing assistant’s duties at Firm B and in part based on the employee’s statements to the firm,
that the employee had not worked on the matter in which Firm B was representing the defendant
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in the lawsuit and did not otherwise have access to information relating to Firm B’s
representation of the defendant. In making a decision not to implement screening procedures,
Firm A would be taking a risk that could result in the firm later being disqualified from
representation of the plaintiff in the lawsuit. If the facts turn out to be otherwise than Firm A
believes and the new employee did in fact work on the matter in which Firm B was representing
the defendant in the lawsuit or otherwise had access to information relating to Firm B’s
representation of the defendant, Firm A could be disqualified from representing the plaintiff in
the lawsuit because of the failure to implement screening procedures. Reliance on the
employee’s statements to the contrary would not change that result. Firm A can best avoid this
risk by utilizing appropriate screening procedures with respect to the newly hired marketing
assistant.
CONCLUSION
Under the Texas Disciplinary Rules of Professional Conduct, a law firm representing a
party in a lawsuit that hires an employee who is not a lawyer, paralegal or secretary but who was
previously employed by the law firm that represents the opposing party in the lawsuit may in
some circumstances be required to withdraw from the representation. The hiring law firm will
be required to withdraw from the representation if the employee in question had in the prior
employment worked on the lawsuit or otherwise had access to information concerning the prior
employer’s representation of the opposing party in the lawsuit and the hiring law firm fails to
take effective steps, which normally would include screening the newly hired employee, to
prevent the employee from disclosing or using in the hiring law firm confidential information
related to the lawsuit. In all other circumstances, the hiring law firm will not be required to
withdraw from the representation unless, regardless of the hiring law firm’s attempts to prevent
improper disclosure or use of any confidential information relating to the lawsuit acquired by the
employee in the prior law firm, the employee actually discloses or uses such confidential
information in the hiring law firm. Because issues of disqualification are determined by the
courts based on standards that are not necessarily identical with the requirements of the Texas
Disciplinary Rules of Professional Conduct, in some circumstances a law firm may be held to be
disqualified from a representation even if there has been full compliance by the law firm with the
requirements of the Texas Disciplinary Rules concerning successive employment of non-lawyer
employees.
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